House Oversight Committee Chairman Darrell Issa, R-Calif., hears from Inspector General Michael Horowitz, the Justice Department's internal watchdog, on Capitol Hill in Washington Sept. 20, 2012. / AP Photo
Updated at 3:22 p.m. ET
(CBS/AP) WASHINGTON - A Republican House committee chairman said Thursday that a watchdog report on a bungled gun-trafficking probe in Arizona is a huge step toward restoring public faith in the Justice Department.
Republicans on the House Oversight and Government Reform Committee praised the findings of Inspector General Michael Horowitz, who faulted the agency for misguided strategies, errors in judgment and management failures in an operation that he said disregarded public safety and allowed hundreds of guns to reach Mexican drug gangs.
"There needs to be supervision; there needs to be oversight," and law enforcement operations like Fast and Furious need to be referred at the start to "the highest levels" of the department, Horowitz testified. His report faulted mid-level and senior officials for not briefing Attorney General Eric Holder much earlier.
The report proves "to both sides of the aisle that you could" do the job of looking into the facts of Operation Fast and Furious, "and I want to personally thank you," Committee Chairman Rep. Darrell Issa, R-Calif., told Horowitz.
It was the murder of Border Patrol Agent Brian Terry that sparked the outcry over investigative tactics of the Justice Department's Bureau of Alcohol, Tobacco, Firearms and Explosives. Terry was gunned down by illegal immigrants in December 2010, CBS News investigative correspondent Sharyl Attkisson reports. Two AK-47-type rifles from Fast and Furious were found at the scene.
Operation Fast and Furious involved "gun-walking," an experimental tactic barred under longstanding department policy. ATF agents in Arizona allowed suspected straw purchasers to leave Phoenix-area gun stores with weapons in order to track them and bring charges against gun-smuggling kingpins who long had eluded prosecution, but they lost track of most of the guns.ATF whistleblower John Dodson told CBS News he and his colleagues had been ordered to let thousands of guns fall into the hands of Mexican drug cartels -- including .50-caliber rifles -- in a strategy to see if they would lead investigators to a drug kingpin, Attkisson reports.
(Watch at left Attkisson's report)
In Fast and Furious alone, ATF allowed 2,000 weapons to be purchased by suspects -- yet there were no arrests or indictments until Terry was killed, Attkisson reports.
About 1,400 of the total have yet to be recovered.
The inspector general was walking a fine political line between vociferous Republican criticisms of the operation begun during the Obama administration and Democratic defenses of Holder.
"We found no evidence that the attorney general was aware" of Operation Fast and Furious or the much-disputed gun-walking tactic associated with it, Horowitz told Democratic delegate Eleanor Holmes Norton of the District of Columbia.
House Republicans see the IG's report as vindication because it criticizes one of their favorite targets: Holder's Justice Department.
Issa has maintained for months that affidavits in still-sealed wiretap applications in Operation Fast and Furious could have tipped off Justice Department lawyers that agents were using the risky tactic called gun-walking, which was at the heart of the controversy and led to hundreds of illicitly acquired guns being recovered from crime scenes in the U.S. and Mexico. Horowitz agreed with Issa.
"You would read these ... affidavits and see many red flags, in our view," said Horowitz. "We interviewed three of the five" lawyers who reviewed the 14 wiretap applications, and "all three indicated that they did not routinely read the affidavits when they came to them."
Democrats have suggested there is nothing in the applications that would have caused senior officials to see any red flags.
While critical, the IG's report knocks down some of the many accusations Republicans have made about the Obama administration during their year-and-a-half-long investigation of the ATF operation.
"We found no evidence" that staff at the department or at ATF informed the attorney general about Operation Fast and Furious before 2011, the report says. The operation begin in Phoenix in late 2009.
Former Acting Deputy Attorney General Gary Grindler received a briefing on Operation Fast and Furious in 2010.
"We found, however, that the briefing failed to alert Grindler to problems in the investigation," the report says.
"We found no evidence to suggest" that Assistant Attorney General Lanny Breuer, head of the Justice Department's criminal division, was aware that the ATF and the U.S. Attorney's Office in Arizona had adopted a strategy of not interdicting firearms, the report adds.
Still, the inspector general's report provided some validation for the Republican-led investigation.
The inspector general referred 14 people for possible department disciplinary action in Operation Fast and Furious and a separate, earlier probe known as Wide Receiver, undertaken during the George W. Bush administration Grindler, Breuer and two other people from the Justice Department, four from ATF headquarters, four at ATF in Phoenix and two from the U.S. Attorney's Office in Phoenix.
A former head of the ATF, Kenneth Melson, and a deputy assistant attorney general in Justice's criminal division in Washington, Jason Weinstein, left the department upon the report's release Wednesday the first by retirement, the second by resignation.